June 30, 2014

One of the early principles of online marketing was disintermediation -- a typically dense and obnoxious word that digi-dweebs used to mean "eliminating the middle man."

The thinking went like this: Levi's makes jeans. People
buy jeans. The web will allow people to buy jeans directly from Levi's
and eliminate the unnecessary costs of distribution, promotion, and
retailing that are necessitated by middlemen.

Before the tech crash of 2000, it was widely believed that online economic activity would overtake traditional brick-and-mortar activity by allowing disintermediation.

This belief -- still held widely by simpletons who have no idea how humans or business work -- is still floating around.

As usual, in the delusional world of modern day marketing, the fact that online commerce constitutes just 6% of retail activity (US Dept. of Commerce, Q2 2014) and good old brick and mortar retail activity constitutes 94% of retail business activity is of no consequence. Facts don't mean much these days.

To a large extent, the web has not disintermediated anything. Amazon doesn't manufacture clothes, books, bicycles, cameras, CDs, and wine. Neither does eBay. They're just a different kind of middle man that happens to be on line instead of at the mall.

Stoughton is a communications planner at a UK agency and seems to know his material very well. I say "seems to" because I could only understand about 1/3 of his piece, but what I understood seemed smart.

Stoughton made several good points, but the one that interested me most was his point that for a medium that was supposed to disintermediate everything it touched, the web has misintermediated the living hell out of advertising. (By the way, misintermediate is my term, don't blame him.)

In fact there is so much misintermediating going on -- so many middlemen in the buying, selling, bidding, and placing of online ads -- that no one even knows what the hell they are buying or where the hell it is running.

Traditional advertising is pretty simple. I buy the back page of the NY Times news section and I see my ad on the back page of the NY Times news section.

When I buy a banner ad, on the other hand, the astonishingly arcane black box of adtech kicks in.

According to a video called "Behind The Banner" here's what happens when a web page loads (I have taken the liberty to edit some of their copy):

When a person visits a web page, a request is initiated for an advertising impression

An impression request is generated based on what the web page knows about the person

The impression request is forwarded to the publisher's ad server

The publisher checks to see if this impression matches any of its pre-sold ad inventory

If the impression hasn't been fulfilled, it is sent to one of several ad exchanges

Servers looking to bid on the impression may communicate with other servers to augment the data they have on the person visiting the site

Next, an auction takes place in which third parties bid on the chance to fulfill the impression

The impression is sold to the highest bidder, for the second highest bid price

The banner is then sent to the web page and appears to the user. The selection of one of the advertiser's banners can trigger a whole new process

June 26, 2014

A few months back I wrote that the foundations of social media marketing were crumbling (here and here.) Well, now the walls are caving in, too.

You know you're in trouble when the press and the pundits turn on you. The way this game works is that the chatterers first fall in love with your story -- they don't just report it, they amplify it. And then when reality rears its ugly head, like rats, they scramble for the exits.

You know the trouble is serious when they start referring to "the hype" as if they weren't the bozos who disseminated it.

That's exactly what's happening with social media.

Last week, a silly Gallup study (based on self-reported nonsense) and a study of Facebook engagement triggered a flood of anti-social media reporting in the press.

The Wall Street Journal headlined its story "Social Media Fail to Live Up to Early Marketing Hype"

And the website Marketing Land headlined a story..."For Major Brands 'Engagement Has Plummeted' On Facebook"

Of course, the fact that the Gallup study is pure hogwash and "engagement" has always been complete bullshit doesn't change the fact that social media marketing is a giant flop.

While the press is jumping ship on social media, there are still a few stalwarts who are heavily invested in the delusion of social media marketing. These people are paddling very hard to save the cause by trying to shoot holes in the Gallup study. They are on a fool's errand. It's true that the Gallup study is garbage, but this tactic won't resurrect the stinking carcass of social media marketing.

The social media industry has no one to blame but itself. They created and instigated the astounding hype about social media marketing and refused to rein in the zealots and maniacs in their midst whose immoderate and provocative rhetoric created an environment in which a backlash was inevitable.

The people I really feel sorry for in this whole ridiculous saga are the agencies with integrity who lost good accounts by being honest with clients. They tried to tell cement-head clients that social media was criminal hype. What did they get for their trouble? Fired.

June 24, 2014

Agencies are often asked this question: If advertising is so effective, why don't you advertise?

The answer they usually give is this: Our potential customer group (target market) is so small that mass market advertising is imprudent. Instead we use marketing techniques that are more productive for a company like ours that needs to talk to a very small group of prospects one at a time.

This semi-baloney usually satisfies the questioner.

But this excuse only holds up because of the expense of traditional advertising. The same excuse can't be invoked for their lack of effective use of social media or content marketing. That stuff is "free."

Agencies are constantly haranguing their clients about the need to harness the magic of social media and content marketing -- and the expertise they can deliver if the client will just pay them to do it -- and yet the social media and content marketing efforts of agencies is somewhere between pathetic and non-existent.

Blogs are a perfect example. I recently checked two websites that measure the popularity of advertising and marketing blogs. (As you would expect with online metrics, the lists are alarmingly inconsistent -- on one list this blog is #21 on another it's #55.)

But here's the amazing thing. Put both lists of top 50 advertising and marketing blogs together and you find exactly one agency blog. One.

Now if I'm not mistaken, agencies are supposed to be the experts at social media and content. I mean, companies pay them handsomely to produce this stuff.

Considering that virtually every agency in the universe has some kind of blog, and considering their unique expertise at producing "compelling content" and their amazing online marketing skills, you'd think agencies would dominate the lists of advertising and marketing blogs.

Why don't they?

There are only two possible explanations. The first is that they are not competent to create anything that anyone wants to read. I doubt that this is the reason.

I think the real reason is the second possibility -- they're full of shit.

They tell their clients to invest in the awesome power of social media and content marketing, but they are unwilling to do it themselves. They won't spend their own time and money on this magic, but they're eager to spend their clients'.

Apparently what's good for the goose is not good for the gander. After all, the goose lays golden eggs.

(By the way, there are several excellent agency blogs. Two of my favorites are written for their agencies by Dave Trott and Vinny Warren.)(Oh, and while we're chatting....you'd think clients would have the sense to hire people to do their social media work who have proven their skills by being successful at it, instead of agencies who have proven their incompetence by being terrible at it. But that would be way too sensible. Sorry.)

June 23, 2014

The bad news: Online advertising had one of its worst weeks ever last week.

At least four different news stories emerged casting a very negative light on the miracle of online advertising.

The first was triggered by a little internecine warfare between eBay and Google. Slate ran a piece called We Have No Idea If Online Ads Work. Here's a quote from the article:

"Last year, a group of economists working with eBay’s internal research lab issued a massive experimental study with a simple, startling conclusion: For a large, well-known brand, search ads are probably worthless.

This month, their findings were re-released as a working paper by the National Bureau of Economic Research and greeted with a round of coverage asking whether Internet advertising of any kind works at all."

By the way, AdContras knew about this study last year when we published a piece about it. Suddenly it's news.

Unfortunately, the premise of the story fell apart when it was discovered that the "reporter" got his stats wrong by a mere 6,000%. In fact, teens spend 21 hours a week with television. In the true spirit of excellence in journalism, what did FT do? They just changed "minutes" to "hours" and let the headline stand despite the fact that it was now totally meaningless.

They did get one thing right, however:

"In theory, the smartphone is the new television – a consumer technology device through which everyone absorbs information and entertainment. As an advertising medium, however, it is useless by comparison. Not only is there no equivalent in value to the 30-second advertisement but the industry is struggling even to imagine one."

Apparently Ms. Mayer hasn't visited her website recently. As I write this, here's the "art" that is on display in the upper right quadrant of my Yahoo home page:

Man, that is some artistic shit.

Now, it's pretty clear what Marissa is up to here. She's obviously out to kiss the asses of the overfed peacocks who, this time every year, turn Cannes into a grotesque carnival of wastefulness and self-congratulation. There's nothing that makes a self-worshipping ad poser glow and buzz like being told he's an artist.

Marissa then demonstrated a degree of cluelessness about advertising unmatched, even by a tech ceo.

"Digital advertising needs to aspire to be as good as art and then some."

Yo, M -- I got some news for you. In the septic tank that is the ad industry, digital advertising is the stuff flopping around the bottom.

Aspire to be art? This stuff doesn't even aspire to be ordinary.

Advertising has always been 90% lousy, but online advertising has set a new standard for awfulness.

The fact that a ceo of one of the world's largest media companies believes digital advertising needs to "be as good as art and then some" tells you something about the cocoon of fantasy and delusion these people live in.

M-- just a word of advice from an old hand at this game. Be careful what you say in public. People might think you're serious.

June 18, 2014

Over in the UK they have Thinkbox which seems to do a very nice job of representing the TV industry's interests with relevant material like this.

Over here, the TV industry seems to be DOA and very happy to have online advertising eat its lunch.

Which brings us to today's sermon.

A few weeks ago I wrote that online usage was dropping at twice the rate of TV. Numbers I've seen since then seem to indicate it's dropping much faster than that.

As usual, the advertising and marketing industries have it all backwards. And also, as usual, the trade press doesn't have a clue.

You've no doubt been reading all the bullshit about how the rise of mobile devices is killing traditional media like TV and radio. It's not. The medium that is suffering badly from the rise of mobile is its cousin, traditional online.

According to latest Nielsen's Cross-Platform Report, since 2011 when the use of mobile devices started to explode, internet usage on traditional devices has dropped almost 5% (from 64 to 61 minutes/week.)

Radio usage has dropped about 4% (from 173 to 166 minutes/week.)

TV usage has dropped less than 1% (from 306 to 304 minutes/week.)

You'd never know this if you listened to the bullshit you hear from agencies or the dreck you read in the trade press. They're still on the "TV is dead" nonsense they invented 10 years ago.

The result is that agency buyers will continue to shift money to mobile from TV, instead of from online.

And the clueless TV industry seems blissfully satisfied to let it all happen.

June 16, 2014

I've been writing this blog now for almost 7 years. My blogging experience has taught me a few things about social media and online marketing. Here are seven of them:

1. Social media can be effective
It's a slow build and it takes a great deal of effort, but...if you know what you're doing; you are willing to invest a lot of time and effort; you are a small brand; and you have something interesting to say...social media can pay off.

2. Most people are too scared to be effective
Being effective at social media means having a voice that is interesting and different. Most people aren't interesting and are afraid to be different. Agencies and agency executives can't afford to be different. It's risky. Clients don't want to read unusual opinions, they want their mundane beliefs confirmed. That's why most blogs and most "content" is deadly boring and a waste of valuable pixels. My former agency was a perfect example. My blog generated more views in a day than the agency website generated in a year. But most of my partners were too afraid to connect the blog to the agency. I don't know if they were right, but I do know they were scared.

3. It's better to be interesting than right
If you're a blogger or if you're using social media to further your brand or career you need to be provocative or no one will pay attention. Sometimes you will be wrong. So what? Nobody bats a thousand. Being right is easy, being interesting is hard.

4. It's better not to post than to post something dull
Readers will give up on you very quickly if you are boring. It's better not to post at all than to post either dull material or material that is easily found elsewhere. I used to post 5 times a week. Then I got bored with what I was writing. Now I post 3 times a week, and sometimes 2. I'm still bored, but less frequently.

5. Most social media is a waste of time
In the time I've been writing my blog I've known scores of people and scores of agencies who've started up blogs. Almost all of them have either stopped or are just going through the motions. If you're not committed to it, if you don't have something different to say, if you're not a good writer, don't waste your time. If you're just doing it to express yourself, fine. But if you're doing it to promote yourself, find something else.

6. Most social media "experts" are full of shit
First of all, most marketing experts of any kind are full of shit. But social media experts have set a new bar. Having achieved
a little success at social media it is my observation that most "experts" don't know what they're talking about. They
repeat the same social-babble at every conference and in every article. They over-estimate the effectiveness and power of social media. The three most important things to know about social media are the three
things they never say:

1. It rarely works as expected
2. Most of their clients have nothing to say that anyone is interested in hearing
3. Did I mention it rarely works as expected?

They make social media success
sound way easier than it is. And they define social media success in the most charitable terms. Remember, the way a social media "expert" makes a living is by convincing you to do it and keeping you at it.

7. I learned something about myself, too
I found out that I seem to be better at writing about advertising than I ever was at writing advertising.

June 12, 2014

If I can't be an artist, at least I want to be helpful. I want to change things.

I've seen the damage that crass consumerism can do. I don't want to be a peddler. I am nobler than that.

You know what I mean, right? You agree, right?

Well, here's the thing. If you're in advertising, you're a salesman. It doesn't matter what you think you are or what you want to be. You're a salesman. I don't like it either.

One of the problems advertising has always faced is that there are a lot of people in the business who don't want to be salespeople.

They have a vested interested -- a personal, self-image interest -- in not thinking of themselves as salespeople. And today they have more opportunity than ever to act on this illusion.

They have convinced themselves, and many others in the marketing industry, that selling is not the purpose of advertising.

They go to conferences and write books and make presentations that tell us that the nature of consumer behavior has changed. That selling is no longer our raison d'etre. That the purpose of advertising is to co-create, or to have conversations, or to build relationships or communities.

They'd rather do their work behind an opaque curtain. They'd rather create content and pretend they're not making advertising. You see, they're being helpful.

They'd rather make believe that what they're doing is a form of social intercourse. It makes them feel better. They're not here to sell you something. They just want to have a conversation and build a relationship.

I'm afraid not.

They can cling to their timid, anemic illusions all they want but in the end they will be judged on how good they are at selling.

June 11, 2014

While I am fond of calling advertising pundits, trade press reporters, and marketing gurus morons, nitwits, and cement-heads, the truth is many of them are pretty smart.

So how can it be that they have been so wrong about so many things over the past 10 years? For example, we've been told for 10 years that TV was dying when in fact viewing has reached record highs. How can this be?

Part of the problem is "narratives" -- the stories that cultures spawn. Once a narrative is born, it is very hard to kill.

Equally important is our naivete about what we call "research."

Last week I wrote about the lack of understanding of mathematics that plagues our industry. This is also true of our deficiencies in understanding research.

In the hard sciences, research is reasonably reliable because they measure things. In the soft (social) sciences, research is often not about measuring things, but about asking questions.

One of the most unreliable practices of our marketing "researchers" is to ask people questions instead of measuring
their behavior. In other words, rather than watching to see if you're cheating
on your girlfirend, they ask you if you are. Then they treat your
answer as a fact rather than just the bullshit it is.

The consequence of this is that a great many of the surveys, reports, and studies we read tell us nothing about what we're trying to understand, they tell us what people say about what we're trying to understand. A very different thing.

...The number spikes to 37% when it comes to millennials surveyed for the
study, who said they would not be loyal to a brand that doesn't have a
strong loyalty program...

According to the study, 68% change when and where they make purchases to
get loyalty rewards, and 60% will switch brands if incentivized.

They use numbers and percents to pretend they have facts. There isn't a fact in sight. All they have is what people say they do. There is no more unreliable way to ascertain what people actually do than to ask them.

The "research" was done by Accenture, the consulting company. Listen to this frenzied nonsense from the report:

"...the number of consumers who watch broadcast or cable television in a typical week plunged to 48% in 2011 from 71% in 2009

Those are absolutely stunning results, which is (sic) accurate suggest that
consumer behavior on television watching is changing faster than anyone
had expected."

Accenture’s explanation for the trend is that the TV is losing ground to other devices – mobile phones, laptops and tablets..."

All this hysteria was based on asking people questions,not measuring their behavior.

Fortunately, someone was actually measuring behavior during this period,so we can see how wrong the self-reported baloney was(click chart to enlarge.)

According to Nielsen's Cross-Platform report (Q3, 2013) TV viewingduring the period of Accenture's "collapse" didn't change at all. The only thing that changed were the answers that people gave to Accenture's annoying survey takers.

June 05, 2014

I often read that TV advertising isn't as powerful as it once was because people are sometimes distracted by other media while they're watching TV. They're tweeting, or they're on Facebook, or they are doing something else on line.

While I haven't seen any research that confirms this hypothesis, it seems logical to me and I think it's probably true.

Here's what I don't understand. Why isn't the same thing true for online advertising?

If a "second screen" distracts us from TV advertising, why doesn't it distract us from online advertising? If we're watching TV and we're on Facebook simultaneously, doesn't it seem curious that Facebook distracts us from TV but TV doesn't distract us from Facebook?

Is there something unique about online advertising that makes it immune to the second screen effect? If so, I'd love to know what that magical thing is.

You see, here's the thing. If multi-tasking is really as damaging as our chattering media experts seem to think it is, then it is having a far more deleterious effect on online advertising than on TV.

Here's why.

We know how much time the average person spends watching TV and we know how much she spends on line. According to Nielsen's Cross-Platform Report for the 1st quarter of this year, the average adult (18+) spent about 36 hours a week watching TV and about 5 hours a week on line.

I don't know how much time the average person spends doing both simultaneously, but it doesn't matter. Whatever the number is, it affects online advertising 7 times as much as it does TV advertising.

Here's why.

Let's say the average person spends 2 hours a week double-screening. That means she is distracted from TV by a second screen 2 hours out of 36, or about 6% of the time. But she is distracted from the web by a second screen 2 hours out of 5, or 40% of the time.

If you're bad at math, here's what it looks like visually.

So if multi-tasking is bad for advertising, the pernicious effect has to be way badderfor online advertising than for TV advertising. In fact, it has to be 7 times badder.

It's funny that I never hear about this from agency media experts or read about it in the trade press.

June 04, 2014

The result is that we're easily impressed, mislead, and bullied by sneaky or irrelevant data, meaningless charts, fast talking metrics monkeys, and cement-head marketing mavens who know even less than we do..

Here's an example.

Someone recently sent me one of those articles about the brilliance of auto makers shifting to online media to attract the precious Millennials. The piece featured this fact...

"Millennials, defined as 18 to 30 year olds, make up 40 percent of the total available car buying population..."

Wow! We better get our millennial strategy going pronto, right?

Not so fast.

While they may make up 40% of the total available (that's the sneaky weasel word) car buying population, they make up a tiny percent of the actual car buying population.

In fact, the last stats I saw were that 18-34 year olds buy about 12% of new cars. So 18-30 year olds have to be less than 10% of actual car buyers.

Let's go to the blackboard.

If 18-30 year olds are 40% of the available population but only 10% of actual buyers, that means they index at 25. That is, they buy 25% of what they would be expected to buy if they bought proportionately to their population.

Meanwhile, if people over 30 represent 60% of the available buyers and buy 90% of the actual cars, they index at 150. That means they buy 1.5 times as many cars as they should in a normal distribution.

So if this guy's numbers are correct, a person over 30 is six times as likely to buy a new car as someone under 30.

June 02, 2014

I never attended college. I was enrolled and I graduated, but I never actually attended.

My college had the unfortunate habit of scheduling classes at inconvenient times when horses were running, pool rooms were operating, and the occasional hippie chick required horizontal therapy.

I majored in political science because they had no attendance requirements. A very fortunate circumstance for someone as busy as I was.

Every now and then I was required to attend a class to hand in a paper, or a form, or prove I was alive.

I remember one particular instance of attending a class in which the lecturer said something memorable. This guy, by the way, was young and charming and made his way through the poli sci co-ed community faster than Vladimir Putin through Crimea.

Anyway, apropos of Putin, on one particular day this guy made the comment that at the time of the Russian revolution Lenin's boys only had the support of about 5% of the populace. The reason they successfully seized control of the country was that they were far better organized than any other group.

He gave us a general rule of politics: In times of chaos, victory goes to the best organized.

Which brings to mind the current situation in the advertising industry.

It is pretty clear that despite the well-documented failings of online advertising, it has seized control of the advertising business. I went to Adweek's front page today and found that of the 5 stories listed as "most popular," 4 1/2 were about online advertising.

This is not unusual. While Internet advertising constitutes less than 5% of total global ad spend (I think it's about 15% in the U.S.) its advocates are the Leninists of marketing. They are true believers, they are well-organized, they are determined, they have a narrative, and their competitors in the broadcast and print industries are too cowardly to fight.

The TV and radio industry are too busy battling each other over ad budgets to challenge the online industry. The typical TV sales person is actively trying to drum up business by telling agencies and clients how screwed up the other TV guys are.

In addition, every broadcast and print entity now has its own online component. So they are afraid to stand up to online media because they might undermine the people they have on the street trying to sell their online inventory.

Meanwhile online advertising is a disaster. As I reported a few days ago...

But they're easily getting away with it and growing impressively. They have the press in their back pocket; they have ad agencies pimping for them; and the traditional media are too timid and spineless to defend themselves.

Broadcast and print are pathetically unprepared for this fight. They haven't learned that if they don't tell their story, no one else will.

Sadly, all the hippie chicks are gone. But the Leninists are still winning.

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Ad Contrarian Says:

"Creative people make the ads. Everyone else makes the arrangements."

"Delusional thinking isn't just acceptable in marketing today -- it's mandatory.""Good ads appeal to us as consumers. Great ads appeal to us as humans."

"Social Media: Tens of millions of disagreeable people looking to make trouble."

"As an ad medium, the web is a much better yellow pages and a much worse television."

"Sometimes success in the advertising business is about sitting quietly and letting clients proceed with their hysterical delusions."

"Marketers prefer precise answers that are wrong to imprecise answers that are right."

"Brand studies last for months, cost hundreds of thousands of dollars, and generally have less impact on business than cleaning the drapes."

"The idea that the same consumer who was frantically clicking her TV remote to escape from advertising was going to merrily click her mouse to interact with it is going to go down as one of the great advertising delusions of all time."

"Nobody really knows what "creativity" is. Every year thousands of people take a pilgrimage to find out. This involves flying to Cannes, snorting cocaine, and having sex with smokers."

"Marketers habitually overestimate the attraction of new things and underestimate the power of traditional consumer behavior."

"We don’t get them to try our product by convincing them to love our brand. We get them to love our brand by convincing them to try our product."

"In American business, there is nothing stupider than the previous generation of management."

"If the message is right, who cares what screen people see it on? If the message is wrong, what difference does it make?"

"The only form of product information on the planet less trustworthy than advertising is the shrill ravings of web maniacs."

"There's no bigger sucker than a gullible marketer convinced he's missing a trend."

"All ad campaigns are branding campaigns. Whether you intend it to be a branding campaign is irrelevant. It will create an impression of your brand regardless of your intent."

"Nobody ever got famous predicting that things would stay pretty much the same."